WTO agrees with Spain in dispute over US tariffs on black olives

The World Trade Organization (WTO) ruled that the United States’ import tariffs on Spanish black olives are “incompatible”With the regulations of the body, in a dispute raised by the European Union (EU) since 2019 and whose final decision was delayed by the pandemic.

The United States acted inconsistently with the rules of the OMC in various aspects of the investigations that it carried out, and that had led to the imposition of these tariffs in the form of countervailing duties, sources close to the WTO indicated.

The WTO group of experts that judged the dispute specifically considered that the United States acted incorrectly by deducing that the subsidies granted to Spanish producers of black olives under the framework of the Common Agricultural Policy (CAP) of the EU could be punishable by duty.

It also found “inconsistencies”In the United States Department of Commerce’s calculation of the final subsidy margin and the applicable tariff rate for one of the investigated black olive processors.

The decision, which could be appealed by the parties before the Appellate Body, the last instance of the OMC, was issued by the special group created on October 18, 2019 to resolve this dispute, initiated by the EU before the WTO in January of that same year.

The EU argued that the additional tariffs imposed by the United States Department of Commerce since August 1, 2018 on Spanish black olives, which have reached 35%, violated WTO rules by not providing sufficient evidence that hurt US producers.

Black olives are used in USA Mainly for the production of pizzas, and Spanish exports to that economy amount to about 70 million euros per year (2017 figures).

According to sources in the Spanish sector, these tariffs caused the export of black olives to the United States worth 130 million euros to be stopped in the last three years and 70% of the market was lost, in which non-EU exporters such as Morocco or Egypt.

The Spanish black olive generates 8,000 direct jobs and another 8,000 indirect ones; Andalusia produces 80%, Extremadura 15% and there is also a small part of the production in Murcia.

However, the commercial dispute transcends the sector of black olives and for the European Union it is considered of high political value.

Brussels feared that a decision by the OMC favorable to Washington was used by Washington as a first step to challenge the entire agricultural subsidy policy of Europe under the umbrella of the Common Agricultural Policy (CAP).

In the dispute, whose resolution has been delayed on several occasions as a result of the difficulties of meeting of the special group due to the pandemic, countries such as Japan, Australia, Russia, China, Canada, Brazil or India appeared as third parties, among others.

Despite the opinion in favor of Spain and the EU, there is a risk that the case will enter, like others in the dispute resolution system, in legal limbo if it is appealed by USA, since this country, precisely, has been blocking the appointment of new members of the Appellate Body, the last instance of the OMC.